HomeBusinessGold price RECAP January 13-17

Gold price RECAP January 13-17

Gold price RECAP January 13-17

Happy Friday, traders. Welcome to our weekly market round-up, where we look back at the past five trading days with a focus on the market news, economic data and headlines that had the most impact on gold prices and other key correlated assets – and may continue to do so in the future.

After initially looking like they could repeat last week’s modest gains, gold prices have moved higher this week, rising above a key level and consolidating new support.

It looks like there could be a lot of upside momentum and support for the gold price in the first quarter of this year based on how trading has played out over the last five sessions, with previous resistance at $2700/oz rising above.

The week started with a step back. A week ago, the two narratives that appear to be the main drivers of near-term gold investment in early 2025 – the FOMC/monetary policy input function and the lack of clarity (but abundance of rhetoric) surrounding the incoming US administration Fiscal Policy Plans – Uncertainty over US fiscal policy and its impact on the dollar and government bond markets took the lead on Friday as traders sought refuge away from the USD and the gold spot higher pushed. This Monday we saw that move come to an end, as traders returned to expectations that the FOMC would stick to its current aggressive projection of cutting rates just twice this year, which would see a rise in the US currency and a corresponding would result in a drop in the gold price. prices.

See also  Nazi ties with Credit Suisse went deeper than known, hidden files show

Traders took a breather in gold and other major asset classes on Tuesday, with much of the focus on Wednesday’s CPI report. And this is where robust inflows into gold returned. Initial headlines around the updated consumer inflation data pointed to a modest increase in headline inflation, although this was expected (according to market consensus) and remained below +3.0% y/y. What ultimately captured investors’ focus, and subsequently their imagination, was an unexpected decline, however small, in the ‘core CPI’ (e.g. food and energy prices). After a few months of generally stubborn inflation data, this pushes back to the fore the possibility that the increasingly ‘data-dependent’ Fed could be convinced to become more aggressive again in the first quarter or half of 2025 lowering interest rates if inflation resumes its downward trend. As a result, the dollar began a significant two-day decline. To support this as a possibility, Fed Governor Waller publicly noted that such an improvement in inflation data could indeed convince the FOMC to pursue another three or even four cuts this year, and with renewed hope for an even Previously lower interest rate environment, gold prices would recover steadily from mid-morning on Wednesday. This goes back not only to the $2660 position, but also to and through the $2700 level from which the chart has not looked back since.

See also  Is the party over? Alcohol stocks are off to a terrible start to 2025.

- Advertisement -
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments